Credit Cards/Transcript
Transcript Text reads: The Mysteries of Life with Tim and Moby A letter floats down in a kitchen and rests on the table next to Tim who is reading a book called "Credit Card Nation." Tim reads from the typed letter. TIM: Dear Tim and Moby, how do credit cards work? From, Stephen. Hey, Stephen. Personally, I don't have a credit card, but— Moby appears next to Tim holding a credit card letter. MOBY: Beep. Tim reads another letter. A credit card is included in the letter. TIM: Dear Tim, you have been pre-approved for a credit card from the First National Bank of Moby. Here's your card. Sign it and buy anything you want. Sincerely, Moby von Robot the Third: Bank President. Are you sure this is legal? MOBY: Beep. Tim holds the card in one hand and a pen in the other hand. TIM: Well...OK then. Tim signs his name on the back of the credit card. TIM: Basically, buying stuff with a credit card is kind of like having a special loan. Here's how it works. An image shows Tim's hand holding his new credit card. TIM: First, a credit provider issues you a card. The credit provider is usually either a bank or credit card company. Your credit provider will also issue you a credit limit. That's the amount of money they'll let you spend. Side-by-side images show the FNBM bank and the Titan Cred credit card company. TIM: What's my credit limit, Moby? MOBY: Beep. TIM: Five thousand dollars? Really? Oh boy. I'm gonna go get that new Game Station 3 right now. Tim appears at a store with Moby. They are at the counter to pay for the game console. TIM:Put it on the plastic. Tim hands his card to the store clerk, who swipes it. TIM: Right now, the store is authorizing my card. The cash register's screen reads "authorizing" as a green light blinks on the credit card reader. TIM: See that little black strip on the back? It contains coded information that can only be read by a special scanner. Tim points to the black strip on the card above Tim's signature. TIM: My name is in there, and my account number, and my credit limit. If the scanner doesn't work, the cashier can type in the string of numbers on the front of the card. An arrow points to the numbers on the card. TIM: Or if you're buying over the Internet, you type those numbers into the site's order form. An animation shows the numbers being entered on a store's website order form as the card number. MOBY: Beep. TIM: Right. When the cashier scans the card in, the store's machine contacts a computer at my credit provider. Side-by-side images show the store clerk swiping Tim's card and the credit provider's building. TIM: My credit provider agrees to pay the store for my purchase. The cash register's screen reads "Authorizing" and then "Approved!" and prints out a receipt. TIM: And by signing the receipt, I'm agreeing to repay the provider. An animation shows Tim signing the receipt for four hundred dollars. Text reads: One month later… Tim is playing video games when Moby walks by holding an FNBM letter. MOBY: Beep. TIM: Ah, my bill's here. Time to pay up, I guess. Moby gives Tim the bill and he stops playing the game to look at the bill. TIM: When you have a credit card, you get a monthly bill, or statement. It details the purchases you've made on the card and the total amount of money you owe. That's called your balance. The bill is shown containing the information Tim describes. TIM: I've saved up five hundred dollars in my bank account, so I can pay off the whole balance. If you pay your full balance by the due date every month, you won't have to pay any interest, so it's like borrowing for free. The bill details the dates the statement is sent, when the payment is due, and the minimum payment. TIM: But people often put stuff on their credit cards that they can't pay off right away, and that can lead to a lot of trouble. A woman friend holds her credit card and shows someone a crown she purchased with it. TIM: Like, if you don't pay off the whole balance, the remaining amount gets carried over until your next month's statement. And then, you have to pay interest on it. MOBY: Beep. TIM: Yeah, so if I didn't pay my bill on time, I'd owe a bunch more than just my charges. A finance charge (interest) appears on Tim's credit card bill. It is nineteen dollars and seventy-eight cents. TIM: Plus, if you don't make at least the minimum payment, usually around two percent of your balance, you'll get charged with a late fee. A late fee appears on the bill. It is thirty-five dollars. Tim's new balance is five hundred fifty-four dollars and seventy-eight cents. TIM: And if you're late with a couple of payments, your interest rate goes way up. The finance charge now reads forty-seven dollars and sixteen cents, and the new balance is five hundred eighty-two dollars and sixteen cents. TIM: So if you're not careful with a credit card, you might wind up paying a lot more than you spent. The woman with the crown grimaces as she reads her credit card bill. TIM: That's why it's never a good idea to spend any money that you don't have. If you don't have a job, or a source of income, using a credit card probably isn't a good idea. MOBY: Beep. TIM: No, you won't get kidnapped by robots. But a bad credit history can really hurt you later on in life. Having bad credit means that creditors can't trust you to pay them back. So if you're trying to get a loan to buy a house or a car or to pay for something like college tuition, there's a good chance you'll get denied. Images show a house, car, and diploma and cap. Then one by one they get crossed out. MOBY: Beep. Moby shakes his head no. TIM: Wait, you will get kidnapped by robots? I thought you said this was legal! MOBY: Beep. Moby grins. Category:BrainPOP Transcripts Category:BrainPOP Social Studies Transcripts